SCA rules in state's favour in the Nulane case, orders retrial of all accused

The Supreme Court of Appeal (SCA) has upheld an appeal by the state against the judgment of the Free State High Court in 2023 which discharged the accused in the R24.9m Nulane Investments fraud and money-laundering case.

The SCA on Thursday set aside the acquittal of six individual accused and two companies. It also ordered that the accused may be retried for the same offences as if they had not been previously arraigned, tried and acquitted, provided a different judge presides over the trial.

In 2023 five of the accused successfully applied for discharges while another was acquitted as acting judge Nompumelo Gusha ruled the state had failed to pass the tests for putting forward a prima facie case.

Former Free State agriculture department head Limakatso Moorosi, who did not apply for a discharge, was acquitted by Gusha, while her co-accused were discharged. They are:

• Gupta associate Iqbal Sharma;
• Peter Thabethe, former head of the Free State department of rural development;
• Seipati Dhlamini, former provincial agriculture department CFO;
• Dinesh Patel, Sharma’s brother-in-law and a representative of Nulane;
• Islandsite director Ronica Ragavan; and
• Nulane Investment and Islandsite as entities.

The state charged Thabethe and Moorosi with contravening the Public Finance Management Act by allegedly committing the Free State agriculture and rural development department to a contract of R24.9m without following a tender process. The state also charged all eight accused of fraud.

After their acquittal, the state reserved the questions of law during its appeal to the SCA.

The majority judgment said the trial court made numerous errors of law that resulted in the acquittal of the accused.

“This is unfortunate, particularly in a case such as this, where it was prima facie established that scarce public funds were unlawfully extracted from the department and channelled to the UAE by fraud and the misuse of power,” the majority judgment by judge of appeal Anton Schippers and acting judge of appeal Thandi Norman read.

It said the judgment of the trial court was a failure of justice.

“Regrettably, this erodes public confidence in the criminal justice system.”

A minority judgment by acting judge of appeal Cagney Musi mostly agreed with the findings of the majority judgment, but said Ragavan was correctly discharged at the end of the state's case.

“There is no indication, on the facts of this case, of the remotest possibility, not even probability, that any of the accused might incriminate Ragavan,” Musi said.   

The National Prosecuting Authority (NPA) welcomed the SCA judgment.

“After a thorough interrogation of acting judge Gusha’s judgment, the Investigating Directorate Against Corruption (Idac) team took the view that the judge erred in applying the test applicable in terms of the Criminal Procedure Act,” NPA spokesperson Mthunzi Mhaga said.

“This SCA judgment confirms our view that the acting judge misdirected herself in applying the relevant principles with regard to the case and erred in her strong criticism of the prosecution team.”

Mhaga said this judgment paved the way for Idac to reinstate the case within a reasonable period.

“The NPA remains resolute in its stance of effectively prosecuting and holding accountable those responsible for state capture-related corruption.”

Mhaga said beyond this important case, Idac had made significant progress in its efforts to ensure accountability for serious and complex corruption and related crimes stemming from the state capture era.

“It has enrolled 50 cases, declared 133 investigations and partnered with the Asset Forfeiture Unit to obtain freezing and preservation orders amounting to R14.3bn, with R8.2bn in confiscation orders deposited to the Criminal Asset Recovery Account.”

Mhaga said since becoming permanent and with requisite criminal investigative powers in August 2024, Idac has expanded its capacity to enable it to deliver effectively on its prosecution-led mandate.

“Convictions in complex corruption cases take time, and not just in South Africa. The NPA is making steady and important progress in this endeavour and will continue to execute its mandate without fear, favour or prejudice.”

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